New York Federal Court Dismisses Plaintiff’s FDCPA Claim, Finding Communications Regarding Hazard Insurance Were Not an Attempt to Collect a Debt

The United States District Court for the Western District of New York recently granted defendant’s motion to dismiss plaintiff’s first cause of action alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692 et seq. (“FDCPA”), on the ground that plaintiff failed to sufficiently plead that the communications from defendant were sent in an attempt to collect a debt.  See Burns v. Seterus, Inc., 2017 WL 104735 (W.D.N.Y. Jan. 11, 2017).  In 2005, plaintiff signed a note and mortgage secured by her residence.  In April 2009, plaintiff filed a Chapter 7 bankruptcy petition, and in July 2009 the bankruptcy court granted her a discharge.  In February 2014, a representative of defendant called plaintiff and advised her that defendant acquired the servicing rights to her mortgage.  Plaintiff allegedly advised the representative of her bankruptcy, that she discharged her obligation on the subject debt and that she was surrendering the mortgaged property, and requested that defendant cease communication with her.  Plaintiff alleged that from February 2014 up until the filing of her complaint, defendant continued to contact her by using an automated telephone dialing system and by mailing “unsolicited forms” in an attempt to persuade her to reinstate her mortgage.  Plaintiff then commenced her action against defendant alleging, among other things, that defendant had violated the FDCPA.  Specifically, she argued that defendant violated the FDCPA via certain letters in which defendant stated that “because we did not have evidence that you had hazard insurance on your property, we bought hazard insurance on the property and added the cost to your mortgage loan account.” 

Defendant filed a motion to dismiss, arguing that its hazard insurance notices were not attempts to collect a debt and, therefore, “are not subject to the FDCPA.”  The Court agreed holding that the context of the notices, which failed to include any statement of by when, how, and to whom the alleged debt must be paid, demonstrated that they were not sent in connection with the collection of any debt.  Indeed, although the letter stated that defendant “is attempting to collect a debt,” it then stated, “if you are in bankruptcy or received a bankruptcy discharge of this debt, this letter is not an attempt to collect the debt.”   Further, the Court found that plaintiff failed to state a claim under the FDCPA stemming from an unspecified number of telephone calls that she received from defendant, and the complaint failed to assert facts sufficient to demonstrate that defendant, with the intent to annoy, abuse, or harass, was attempting to collect a debt during those calls.  Accordingly, the court dismissed plaintiff’s cause of action alleging violations of the FDCPA.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com or Clarissa Gomez at cgomez@riker.com.